9911796707
TMI Blog2019 (9) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The expenditure in question is incurred only for its manufacturing operations and local environmental compliance from HSE perspective. The assessee submitted that ICT also does not carry out any research and development activities for development of any new project/technology. It is primarily a captive support centre for the local India operation of the assessee. Thus, we are of the considered opinion that the expenditure on research and training does not constitute any international transactions on facts. We also find that the TPO/AO has not considered this expenditure incurred in the earlier years towards R T expenses, as international transactions. Thus, in view of the above discussion, we hold that the expenditure incurred on R T is not an international transaction as per Section 92B of the Act, so as to enable invocation of provision of Section 92 TP Adjustment made with regard to the International Transaction pertaining to Intra Group Services - HELD THAT:- As Consistent with the view taken therein, as agreed by both the parties, we restore this issue to the file of the Assessing Officer, for fresh adjudication, in accordance with law. Accordingly, this ground of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 144(5) of the Act, vide order dt. 26/11/2015. 2. Akzo Nobel India Limited (hereinafter referred to as assessee), is engaged in the business of manufacturing and marketing of paints, speciality chemicals and starch. It has following two business divisions: * Paints Business Division (PBD) - PBD is engaged in manufacturing and supply of decorative paints. PBD has three manufacturing plants situated at Hyderabad, Thane and Mohali. * National Starch and Chemicals Division (NSC) - NSC division is into Natural Polymers Group ('NPG') and Specialty Polymer Group ('SPG'). It is engaged in the business of surfactants, synthetic specialty polymers and natural polymers, agro chemicals, chemicals used in customer care products, fabric and cleaning. 2.1. With respect to its manufacturing operations in both PBD and NPG & SPG division, assessee bears all associated risks such as market risk, product liability risk, credit risk, contract risk etc. on its own account. Therefore, the assessee operates as a normal manufacturer with all normal risks associated with carrying out such business. 3. We have heard rival contentions. On careful consideration of the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in Sony Ericsson to the above effect is in the context of those Assessees whose cases have been disposed of by that judgment and who did not dispute the existence of an international transaction regarding AMP expenses." In view of we note that the facts of the above case are identical to the present issue, thus the principle laid down by the Hon'ble Delhi High Court in the case of Maruti Suzuki India Limited (supra) are applicable to the instant case. Respectfully following the same we dismiss the ground of appeal filed by the Revenue. 6.2. The Kolkata 'C' Bench of the Tribunal in the case of Organon India Pvt. Ltd. vs. DCIT in ITA Nos. 633 & 2459/Kol/2017, order dt. 24/10/2018, applied the ratio of decision in the case of Philips India Ltd vs ACIT in ITA No. 2489/Kol/2017 dated 4.4.2018 for Asst Year 2013-14, and came to a conclusion that the AMP expenditure is not an international transaction. 6.3. The argument of the ld. D/R that on facts the assessee is a distributor, is not emanating from the records. The assessee is engaged in manufacturing and supply activities. Thus, the argument of the ld. D/R is rejected on facts. The facts of the assessee's case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis to the manufacturing operations and addressed the manufacturing process gaps. * provided training to the marketing team on the product, the nature and feature of the products etc. necessary for sales and marketing of the Appellant's products in the designated market i.e. India. * assisted the Quality department in handling product defect/ quality issue or redressing any product complaints from the customers. 8.2. A perusal of the above demonstrates that, on facts the assessee has not carried out any R&T activities. The expenditure in question is incurred only for its manufacturing operations and local environmental compliance from HSE perspective. The assessee submitted that ICT also does not carry out any research and development activities for development of any new project/technology. It is primarily a captive support centre for the local India operation of the assessee. Thus, we are of the considered opinion that the expenditure on research and training does not constitute any international transactions on facts. We also find that the TPO/AO has not considered this expenditure incurred in the earlier years towards R&T expenses, as international transactions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This ground is dismissed as premature. 13. Ground No. 8, is against the levy of interest u/s 234A, 234B, 234C & 234D of the Act. This ground is dismissed as consequential in nature. 14. In the result, appeal of the assessee is allowed in part. 15. We now take up the revenue's appeal in I.T.A. No. 560/Kol/2016. 16. Ground Nos. 1 & 2 are on the issue as to whether the provisions made for meeting liabilities is an ascertained liability. The Assessing Officer disputes the directions of the DRP to allow this provision as an ascertained liability. The ld. DRP on the ground that the provision was made based on data of past activities and on the ground that the provision was made in a systematic and scientific manner directed the Assessing Officer to allow the same by applying the propositions of law laid down by the Hon'ble Supreme Court in the case of Rotork Controls India (P.) Ltd. v. Commissioner of Income-tax, Chennai [2009] 314 ITR 62 (SC). 16.1. After hearing rival contentions, we find that the DRP has set aside the issue to the Assessing Officer with a direction to delete the additions after verifying the facts submitted by the assessee. The assessee had submitted that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble estimate can be made of the amount of obligation. 21. Considering the above judicial pronouncements and the facts on hand, we have no hesitation in upholding the Tribunal's view that though actual payment of gratuity may be made at a later point of time upon periodical release of the employees from service, it is provision having been made on actuarial basis it cannot be stated to be an uncertained liability so as to add it back in terms of Clause (c) to Explanation 1 to Section 115JB. In the result, all the tax appeals are dismissed. 16.3. In any event, we are dealing on facts with prior period items. Hence this argument of the ld. D/R is dismissed as devoid of merit. 17. Ground No. 3, raised by the revenue disputes the deletion of disallowance by the DRP, of normal depreciation of ₹ 1,52,84,916/- and additional depreciation of ₹ 38,21,229/- pertaining to Colour Soluble Machine. 17.1. The company had claimed normal and additional depreciation on colour soluble machines, which were installed at their respective dealer's premises under the category plant and machinery. The Assessing Officer was of the view that the colour soluble machines, do not ai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
